Archive for October 13th, 2011

(CNS): The public is being invited to submit their nominations for next year’s royal birthday gongs. Duncan Taylor is asking people submit names and details for the Queen’s Birthday Honours 2012. Nominations must be received by Thursday, 3 November and, as ever, final recommendations for OBEs and MBEs are considered in the United Kingdom and the Certificate and Badge of Honour are considered here in Cayman. Officials said long service is not enough to get one of the royal medals and nominations must be supported by a “persuasive account of the outstanding or innovative or self-sacrificing services and achievements … paid or unpaid, in one field or several, and what has raised them above those of others performing similar services.”

Honours Nomination Forms can be requested by e-mail from penny.knight@fco.gov.uk. Copies can also be found on the Governor’s Office website. Please make every effort to fully complete all the relevant sections. Once completed, the forms should be submitted, under confidential cover, to the Governor’s Office. While all recommendations will be acknowledged, the Governor’s Office cannot enter into correspondence about the action taken on them.

(CNS): The Cayman Islands government signed its 27th Tax Information Exchange Agreement on Thursday morning at a ceremony in George Town. This latest tax agreement which signed by the Cayman Islands premier was with the Republic of Argentina and sign on that country’s behalf by Dr Ricardo Echegaray, Head of the Federal Administration of Public Revenue, who was visiting Cayman along with Under Secretary of Public Revenue, Luis Maria Capellano. “The Cayman Islands recognises the value in strengthening its relationships with Argentina and other Latin American countries,” said McKeeva Bush.

“Signing this agreement underpins our commitment to building this relationship and boosting the Cayman Islands’ reputation in the Latin American region, thereby ensuring that we remain a favorable and transparent international financial centre,” he added.

Also attending the signing ceremony were Members of the Legislative Assembly; senior officials from the Ministry of Finance and the Cayman Islands Monetary Authority; and members of the Cayman Islands International Tax Cooperation Team. Attending on behalf of Argentina were the Adviser to the Federal Administrator, Dr Guillermo Michel; and a representative from Institutional Communications, Mr Federico Hausvirth.

(CNS): A survey of institutional hedge fund allocators’ views on the issue of corporate governance in funds, decribed by the firm as comprehensive, has found that 63% of those who took part in the research were unhappy with governance in Cayman domiciled funds and want improvements. The report by Carne Group, a global investment firm, revealed that many of those interviewed who said they were happy said this was because of the due diligence and oversight that they carry out themselves. The report found 83% of investors rated fund governance as ‘extremely important’ and 91% of allocators said poor governance would cause them to avoid investing in a fund, even if it met performance criteria.

Over the spring and summer of 2011, Carne Group surveyed the largest allocators to hedge funds globally. The firm approached the top 100 allocators and received responses from allocators accounting for over $600 billion in allocations, approximately 30% of all hedge fund AuM. The research revealed that 87% of allocators said that governance had become much more of an issue since 2008.

Examining four jurisdictions, the Cayman Islands scored the lowest ‘happy’ rating in the report compared to Ireland and Luxemburg, where around 15% and 20% of respondents were unhappy. Around 45% or respondents said they were unhappy with the level of fund governance in the Channel Islands. The authors of the report found that, given a choice, respondents would like to be able to place additional reliance on Cayman fund boards but are currently unable to do so.

“By contrast to the Cayman Islands, allocators are extremely satisfied with governance in both Luxembourg and Ireland, with high approval ratings for both jurisdictions. Satisfaction with the Channel Islands was mixed,” the authors stated.

The report is particularly topical coming in the wake of the decision of Justice Jones in the Weavering case, in which directors Stefan Peterson and Hans Ekstrom were found to be guilty of wilful neglect.

Former CIMA chair Tim Ridley described the report as fascinating and said it underscores how increasingly important good governance and transparency are becoming in the hedge fund business and in the offshore arena generally. It highlights how investors and their advisors are exercising greatly enhanced scrutiny of the structure and governance of hedge funds.

“This scrutiny clearly extends to the role and performance of the directors,” Ridley noted. “This is to be welcomed. But one can quibble with the list of the institutions that participated — many of whom are clearly embarrassed by the 'ask no questions' Madoff related failures.”

Ridley also wondered to what extent these institutions and their clients would recognise the next shoe to drop. “If the limits on and performance expected from directors are to be as listed in the report, it is absolutely certain that there will be a significant shortfall in qualified and willing persons to serve as directors and the fees expected by those directors will dramatically increase," he warned.

The report also revealed the problem of directors having too many directorships, a point raised frequently here in the Cayman Islands. The authors found that allocators overwhelmingly agree that the issue of the number of total directorships held by certain independent directors must be addressed. The leading concern, the report said, was that independent directors sitting on fund boards simply have too many directorships, particularly in the Cayman Islands.

Chris Johnson, MD of Chris Johnson Associates, who has often pointed to this issue, said Carne should be commended for taking the initiative to do the research and for preparing such a concise, topical report.

“It sheds light on the perceptions of investors on directors in the Cayman Islands and three competing jurisdictions. Notwithstanding that Cayman was adjusted the least palatable jurisdiction with regard to the thoughts of investors on directors of Cayman funds, it is clear that their main concerns extend to the number of directorships held by each individual and the relationship between the management and the directors.”

The report found that almost 60% of the investors felt that one individual should not hold more than 20-30 directorships, whilst over 30% felt the number to be 30-40 directorships.

“It is interesting to note that in Ireland the law only allows an individual to hold 25 appointments except in group situations,” Johnson said. “Such a number falls well short of those holding over 100 appointments in the Cayman Islands … CIMA and the industry need to address this as a matter of urgency to ensure that Cayman maintains its credibility in the industry. I recommend that they use this report and their own resources to take care of any other shortcomings that are mooted in the report before it is too late.”

The report notes that investors have been lobbying the Cayman Islands Monetary Authority for change as it becomes evident that the governance issue is acting as a drag on the flow of new investment into hedge funds here.

CNS contacted the local regulators, who said that the authority is aware that corporate governance is an extremely important component for hedge fund investors and the financial services sector as a whole.

“It is an issue that CIMA itself has been focused on for some time,” a spokesperson for the Authority said. “As we have publicly stated before, the authority has been conducting an in-depth review of the regulatory framework for corporate governance. This has taken some time because it is not just restricted to corporate governance of funds, but extends to all CIMA regulated entities in every sector for which CIMA is responsible.”

CIMA said it has been examining areas such as the ‘fit and proper’ framework, how directors exercise their responsibilities, the extent to which legislation codifies these responsibilities and issues of transparency.

“We have conducted comparative assessments of other jurisdictions’ standards, and taken into account the recent enhancement of international standards and requirements that are being promoted. We have also been doing a cost-benefit analysis of certain requirements, for investors, service providers, us as the regulator, and the jurisdiction as a whole. It is anticipated that there will be some adjustments to the regulatory framework as a result of this work,” the spokesperson revealed. “We expect that these will begin to be rolled out by 2012 after the necessary consultative and government review process.”

Don Seymour, the vice present of the Cayman Islands Directors Association and MD of dms Management, described the report as “a good effort” and he said it was always valuable to get market feedback, but he noted that despite these comments Cayman was consistently selected as the jurisdiction of choice.

“Although the report doesn't present any new ideas, it can be a useful starting point for those new to the industry,” Seymour told CNS. “The report advocates a one-size-fits-all solution but governance today is far more complex.”

He said the global hedge fund industry is over worth over $2 trillion but only $500 billion is based in Europe, so any report on fund governance needs to consider the fund governance rules promulgated by the SEC to be considered truly objective.

“While we do understand the authors advocating for their jurisdiction, we do disagree with their conclusion about the Cayman Islands industry. This is simply not supported by the facts. In the Cayman Islands our regulators, directors and auditors all serve more funds than any other jurisdiction, yet our industry endured the crisis and thrived. Stakeholders are free to choose any jurisdiction they wish and they consistently select the Cayman Islands. The real test is market preference,” Seymour added.

(CNS): The reported altercation between a UDP backbencher and the PPM leader has caused a well known businessman to write an open letter to both members of the Legislative Assembly condemning their actions and pointing out that Cayman society is suffering from a lack of self-discipline, and with the need for better management of emotions which is affecting youth people, those in leadership roles should be setting an example. Renard Moxam, the owner of Island Companies, said he felt very strongly that “blunders of this nature should never take place between such prominent members” of society anywhere, never mind in the Legislative Assembly.

“As professional politicians you are paid by society at large to represent the people of our country and their needs with your words and your minds and thereby better their situations and lives and not to waste time and public money on petty squabbles and demonstrations of physical strength,” Moxam wrote in his letter to Ellio Solomon and Alden McLaughlin regarding the alleged punch-up in the parliamentary tea room.

“I ask that our political leaders put aside their differences and focus on the present and future wellbeing of our society and ensure our economy is not weakened by these actions either,” the businessman asked.

(Swiss Info): Some 6,000 account holders who bank with the Swiss branch of HSBC will have to answer to the British tax authority. HM Revenue and Customs (HMRC) wants to verify that the account holders have declared all earnings. The potentially wayward taxpayers will get a warning letter offering them a last chance to get their affairs in order. The HMRC said on Thursday that it had already started criminal and serious fraud probes into more than 500 individuals and groups. "They will be offered a window of opportunity to contact HMRC and disclose all their tax liabilities," the HMRC said. A source there told the Reuters news agency that account holders would have 30days after being contacted to come forward.

The names of the account holders reportedly came from a disc stolen from HSBC’s Geneva office.

Britain and Switzerland signed a tax accord last week that would compel Swiss banks to pay backdated income on the long-standing accounts of British tax cheats.

(CNS): The country’s premier is not only taking aim at the media with a number of law suits but McKeeva Bush has also filed a claim against Aunt Sookie, one of the Cayman Islands’ much loved comedy entertainers. Daphne Orrett, a.k.a. Aunt Sookie, a former MLA, has been entertaining generations of Caymanians for many years and is a huge local favourite at the annual Gimistory event with her sidekick, Ezekiel. According to documents filed in the Grand Court this week by attorney Steve McField on behalf of Bush, he has filed suit against ‘Aunt Sookie’ for comments she made on Rooster’s morning phone-in show, CrossTalk, in May of this year.

According to the statement of claim, Bush is seeking damages from Aunt Sookie, one of his own constituents, for comments she made when she called into the show about the premier and in particular remarks he had made at the church they both attend in West Bay. Bush is also suing Randy Merren, the owner of Hurley'sEntertainment as well as the company itself in connection with the comments made by Orrett as Hurley’s Entertainment is the company that broadcasts the early morning talk show.

The suit was filed at the same time as those made against the owner of Cayman News Service, Nicky Watson, and journalist Wendy Ledger over a commentary piece by a regular Viewpoint contributor, ‘Bean Counter’, which discusses the ban on free speech for Cayman Islands civil servants.

As with his suit against CNS, Bush also claims that Merren, Hurley’s Entertainment and Orrett have damaged him socially and politically and his reputation as the country’s premier.

Orrett, who served in the Legislative Assembly for West Bay between 1984 and 1988, is now better known for her contribution to local culture and entertainment. She has been playing the role of Aunt Sookie since 1976 and has captivated audiences both young and old. Orrett told CNS that, like this media house, she intends to contest the suit and said she will be “seeing Mr Bush in court.” Hurley’s Entertainment and Randy Merren will also be contesting the claim.

Bush had sent letters via McField to both Hurley’s and CNS earlier this year threatening to take legal action regarding what he claimed to be damaging comments made about him on Rooster and the Viewpoint posted on CNS unless he received an apology, among other demands.

Watson, who owns the Cayman Brac based online media business which she started in March 2008, fully responded to the premier’s accusations at the time rejecting the claims Bush had made and pointing out that Bean Counter’s Viewpoint was a classic example of fair comment, for which there was nothing to apologise for.

She has also confirmed that Cayman News Service (CNS) will be continuing to contest the premier’s claims against her and her small business, as well as against her employee, who, she noted, had played no part in the writing or posting of the opinion piece.

“It is disappointing that the premier, who claims to accept the right to freedom of expression as part of the Cayman Islands constitution, should take action against a media service which is lawfully exercising that right,” Watson said.

(CNS): Updated – Despite reports to CNS that the police had apprehended one of the suspects following a robbery on Thursday afternoon at Funky Tangs, police say that one person is currently assisting them with their enquiries but no arrests have yet been made. The RCIPS were called to the incident at 1.30 this afternoon at the electronics and music store near the Countryside shopping village in Savannah. Four men entered the premises, one armed with what appeared to be a gun and ordered the female staff member to get down on the floor. The robbers made off on foot with both cash and electronic items. When the police arrived at the scene the area was cordoned off as the search for suspects commenced and items believed to be connected to the robbery were recovered nearby. (Photo Dennie Warren Jr)

An RCIPS spokesperson confirmed that one man is assisting police with enquiries but no arrests have been made. Investigators and crime scene examiners are still on the scene this evening as enquiries continue.

It had been exactly two weeks since Grand Cayman’s last robbery, whereas throughout 2011 the island has suffered an average of more than one robbery per week. The last place to be robbed was the CUC customer service office at the power company’s headquarters in Industrial Park, which was hit by masked armed men on the afternoon of 30 September.

The RCIPS said further details of the latest heist would be released as soon as possible.

(CNS): There was nothing anticlimactic about the finale of the 2011 Fidelity Fun Run series as several division titles and other podium positions were only determined in the final stages of the two mile struggle. From the start, capably administered by Olympic sprinter Cydonie Mothersill Stephens, until the final homestretch, there was great speculation as to whether anyone could upset Marius Acker, and also who would win the overall ladies title in the expected duel between Lauretta Bennett and Tracey Walker.

As it happened, no one could top Marius, and the overall men's awards went to the same trio who finished in one-two-three order over each of the three weeks, with Marius at the fore, followed by Conrad Proud, with Carl Grant next in line. On this occasion, times posted were 10:41, 11:06, and 11:09. Greg Meaker, on the scene for the first time in quite a while, placed fourth in 11:20, while Chadwick Webster was a step behind at 11:21, as he finished fifth for the second week in a row.

Among the ladies, Beth Schreader was triumphant as she duplicated her week one victory in 12:29, but a mid-event non-appearance left her shy of points for the overall title. Lauretta Bennett carried off the number one award with a 12:52 performance, as Tracey Walker gained runnerup honours (13:06). Emma Byrnes placed third overall, timed in 13:21 on this day.

There were 176 runner/walker finishers, with an additional group of pram passengers, and attendees on leash. Prior outings attracted 141 and 181 entries.

Weather on each occasion was sunny, and the favourable conditions contributed to the large turnout.

Representatives of the Fidelity group, who provided the sponsorship, expressed their satisfaction with the activity and organizers, the Phoenix Athletic Club, thanked the sponsors and all volunteers for their assistance.

(CNS): As the Cayman Islands continues its bid to be a world leader in the captive insurance sector it will be showcasing the benefits of establishing captives in the Cayman Islands at the 31 Annual American Society for Healthcare Risk Management (ASHRM) conference and exhibition in Phoenix, next week. Several representatives from the Insurance Managers Association of Cayman (IMAC), and individuals from private-sector firms, the Cayman Islands Monetary Authority, and the Cayman Islands Government will staff the Cayman Islands Financial Services booth to ensure that Cayman’s reputation as a leading, first-rate international financial centre is well known to conference attendees, officials said.

ASHRM is considered to be the healthcare industry’s leading networking and educational event of the year. This is particularly important to Cayman’s insurance industry as Cayman is the leading jurisdiction for healthcare captives and the second leading domicile for number of licensed captives, with a total of 725.

Close to 2,000 attendees are expected to attend ASHRM this year. This will offer Cayman’s delegation the opportunity to build relationships with existing clients, attract new clients, network, and take away information relevant to Cayman’s industry.

The Cayman Islands insurance sector has been attending ASHRM since 1996. Cayman’s participation is jointly sponsored by IMAC and the Cayman Islands Government.

(CNS): The common problem of rising violent crime across the overseas territories has been front and centre during this week’s attorney generals conference. The top governmentlawyers from the regional territories discussed drugs, gangs, money laundering and the maintenance of law and order, which was seen as a common problem. Gun crime across the Caribbean territories has risen at an alarming rate in the last 12 months, British MP Edward Garnier, QC, the chair of the conference, told delegates, who also heard about the issue of the local shootings here in Cayman and the threat such lawlessness poses to all of the territories. (Photo Dennie Warren Jr)

The combination of violent street crime and sophisticated financial crime means attorney generals and law enforcement officials are forced to fight crime on two fronts, the delegates heard at the conference at the Grand Cayman Marriott Beach Resort this week.

Attorney generals from Anguilla, BVI, Montserrat, Turks and Caicos, Pitcairn and the Cayman Islands have come together to discuss the common issues they face. The conference was chaired by the Solicitor General Edward Garnier as well as other officials from the UK, and the Justice Departments of the US and Canada.

Garnier said the UK’s fundamental policy and objective was to ensure “the security and good governance” of the 14 OTs in the face of the remarkable diversity requiring specifically tailored policies. Colin Roberts, the OT’s director, also spoke about the ongoing consultation for finalising the new UK White Paper for the OTs.

The Cabinet Office has set up a webpage to invite public comment on the Cayman Islands’ relationship as an Overseas Territory (OT) with the UK, as part of an ongoing public consultation exercise launched by the UK. Although the UK has already opened a website portal for people across the territories to comment directly on the future relationship with the UK, the Cayman public can also comment via the Cabinet Office, which has set up the page on its website.

This contains the six main questions for which the UK is seeking responses and which will form part of the position paper that the premier will present at the Overseas Territories Consultative Council meeting in London in late November.

“I urge every member of the public to take this opportunity the UK has provided and speak up. Do visit the webpage and learn for yourselves what the UK is proposing with the new White Paper 2012. It will define the relationship with each of the Overseas Territories since one size cannot fit all,” McKeeva Bush said.